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1、EBOOKA Practical Guide to ESG Data and ToolsCONTENTSPART 1What Makes ESG Data Valuable?07PART 2How ESG Can Help Supplier Risk Assessments 09PART 3A Deeper Dive into ESG Use Cases and Risk Scenarios 13PART 4Getting Started:Creating an ESG Strategy 18IntroductionGlobal complexity is accelerating as su

2、pply chains become more interconnected,economies grow and develop,weather patterns change,and societies acquire more sophisticated technology.As organizations struggle to capture this complexity in business decision-making,and as they attempt to assess the viability of potential partners in a world

3、that increasingly requires more sustainable outcomes.ESG data has become more relevant and sought after.03A Practical Guide to ESG Data and Tools03A Practical Guide to ESG Data and ToolsESG the customary abbreviation for environmental,social,and governance metrics has been around for more than a cen

4、tury.ESG primarily originated with socially conscious investors who wanted to align their investments with their values.But in recent years,with the emergence of more and better data plus an increased understanding of modern environmental and social pressures ESG has gone mainstream as a means for o

5、rganizations to measure impacts and manage risks in their value chains.20202030201020001990201520252005199519801890198519751973199320062015202120231980189020002011Sustainable Finance Disclosure Regulations(SFDR)launchedWinter storm Uri devastates TexasSEC reconvenes to discuss climate change disclos

6、ures in financial reportsUN SustainableDevelopment Goals(SDGs)launchedParis Agreement signed by 197 countriesTCFD launchedSustainability Accounting Standards Board(SASB)founded1985Ozone hole detectedQuaker Friends FiduciaryNo-sin investmentsCorporate Sustainability Reporting Directive(EU)mandates su

7、stainability disclosures from businesses operating in the EU2020Global COVID-19 pandemicaccelerates green and social bond issuance and value proposition of ESG fundsEU Taxonomy for sustainable activities launched2018BlackRock CEO Larry Fink publishes annual letter to CEOsurging them to consider long

8、-term value over short-term gainsUN Principles for Responsible Investment(PRI)launched with$4T AUM(AUM in 2021:$103.4T)Carbon Disclosure Project(CDP)CreatedGlobal Reporting Initiative(GRI)startedSouth Africa$625Bdivestiture to protest apartheidSustainalytics founded1990First ESG Index FundDomini Soc

9、ial Index(now MSCI LD 400 Social Index)1987Brundtland CommissionThe term“sustainability”is defined at meeting meant to unify countries around sustainable developmentChernobyl disasterRaises public awareness on E&S risks of nuclear powerInterfaith Center on Corporate Responsibility foundedESG shareho

10、lder advocacy1989Exxon Valdez spillWorst oil spill in history1996Nike sweatshop labor scandalSource:Dun&BradstreetFIGURE 1The Evolution of ESGFIGURE 1The Evolution of ESG04A Practical Guide to ESG Data and ToolsESG encapsulates a broad range of impacts companies may have on society and the environme

11、nt,as well as the effectiveness of corporate governance in managing those impacts.Today,ESG is arising as the global harmonized approach for companies to calculate and report their nonfinancial risk.The criticality of this approach is based on three key drivers:Global enterprise values increasingly

12、rooted in intangible assets that are more vulnerable to nonfinancial risksThe physical realities of climate change and pressures on natural resourcesEvolving social norms and expectations directed at“corporate citizens”The pressures that have helped put ESG in the spotlight also include the impendin

13、g expansion of ESG-oriented regulation,such as the U.S.Securities and Exchange Commissions proposed ESG disclosure rules and the EUs proposed corporate sustainability due diligence directive(CSDDD).But ESG should not be confused with sustainability or sustainable development,which are broader organi

14、zational concepts involving a commitment to“meet the needs of the present without compromising the ability of future generations to meet their own needs.”1 This represents an aspirational vision in which profit,planet,and people can reach and maintain a state of harmony.ESGs definition,however,has l

15、ess consensus,mainly due to the broad remit and objectives that ESG data can help advance.Most can agree,however,that it is a data-driven framework with three distinct dimensions and measurable aspects tied to independent ratings and rankings.2International markets have increasingly coalesced around

16、 a definition of ESG encompassing three main components,as follows:3Environmental(E)Environmental factors involve considerations of an organizations overall impact on the environment and the potential risks and opportunities it faces because of environmental issues,such as climate change and managem

17、ent of natural resources.Examples include energy consumption,waste management,and carbon footprint,including greenhouse gas emissions.Social(S)Social factors address how a company engages with different stakeholders employees,suppliers,customers,community members and more.The criteria may include su

18、pport for human rights and labor standards and whether they apply to the supply chain.Governance(G)Governance factors examine how a company polices itself,focusing on internal controls and practices to maintain compliance with regulations,industry standards and corporate policies.Examples include co

19、mpany leadership and management,board composition,conflict of interest rules,and whistleblower programs.05A Practical Guide to ESG Data and Tools05A Practical Guide to ESG Data and ToolsEach of the three main dimensions is further dissected into more specific themes,each of which encompasses multipl

20、e topic areas:ENVIRONMENTALTHEMESTOPICSNatural ResourcesEnergy ManagementWater ManagementMaterials Sourcing and ManagementWaste and Hazards ManagementLand Use and BiodiversityPollution Prevention and ManagementGHG Emissions and ClimateGHG EmissionsClimate RiskEnvironmental RiskEnvironmental Complian

21、ceEnvironmental OpportunitiesEnvironmental OpportunitiesEnvironmental CertificationsSOCIALTHEMESTOPICSHuman CapitalLabor RelationsHealth and SafetyTraining and EducationDiversity and InclusionHuman Rights AbusesProduct Quality ManagementCyber RiskProduct Quality ManagementCustomer EngagementProduct

22、and ServicesData PrivacyCommunity EngagementCorporate PhilanthropyCommunity EngagementSupplier EngagementSupplier EngagementCertificationsSocial-Related CertificationsGOVERNANCETHEMESTOPICSCorporate GovernanceBusiness EthicsBoard AccountabilityShareholder RightsBusiness TransparencyCorporate Behavio

23、rsCorporate Compliance BehaviorsGovernance-Related CertificationsBusiness ResilienceBusiness Resilience and StabilitySource:Dun&Bradstreet ESG data set topic architecture based on SASB standardizationFIGURE 2ESG Categorization Themes and TopicsFIGURE 2ESG Categorization Themes and TopicsFIGURE 3 Top

24、 Enterprise Priorities in 2023Source:Deloitte74%DRIVING OPERATIONAL EFFICIENCY72%ENHANCING ESG/CSR72%DIGITAL TRANSFORMATION71%IMPROVING MARGINS VIA COST REDUCTION69%ENHANCING RISK MANAGEMENT06A Practical Guide to ESG Data and ToolsA Key Shift:Public Equities to Private MarketsUntil recently,ESG was

25、chiefly associated with publicly held companies,which are often required,or expected,to include this information in their reports and filings.Private companies arent required to submit annual reports and filings on their performance;consequently,there hasnt been a lot of available ESG data from priv

26、ate companies.And yet,a great deal of ESG risk sits in the supply chain,in private markets,in areas such as climate,waste,human rights,and corruption.The global pandemic served as a worldwide wake-up call for the importance of functional supply chains to sustain economies and societies.Integration o

27、f ESG factors throughout supply chains,comprising both public and private markets,is increasingly viewed as essential to be able to ensure the long-term viability of value chains.These demands have aligned with the availability of more accessible technologies that can make it easier to collect the d

28、ata needed for ESG analysis and reporting.Increasing ease of reporting for traditionally under-scrutinized segments of the global economy has,in turn,contributed to the movement to push regulatory requirements for private markets and across supply chains.Apart from these external factors,ESG has gai

29、ned traction because the data that underpins these metrics is being viewed as more trustworthy,with better consistency and rigor.ESG data compilers are increasingly using automated approaches that calculate ESG scores and rankings purely algorithmically,without introducing any human or analyst bias.

30、Some ESG providers are now offering ESG data collected via artificial intelligence(AI)and machine learning(ML)methods such as scraping reports and news channels using natural language processing(NLP),which automatically processes human language in a computational manner.ESG data may be growing in im

31、portance,but how exactly should companies be considering and using it?The urgency of this question is continuing to escalate particularly for procurement and supply management,where ESG is becoming linked to value delivery.In the 2023 Global Chief Procurement Officer survey published by Deloitte,“En

32、hancing ESG”rose to the#2 spot on the list of“Top Enterprise Priorities in 2023,”cited by 72%of survey respondents.(In the prior survey from 2021,ESG was ranked seventh on the list,cited by 68%of respondents.)4This guide is intended to help procurement and supply management teams better understand t

33、he value of ESG data and how it can be used to their advantage to support risk management,decision making,and greater resiliency.07A Practical Guide to ESG Data and ToolsPART 1What Makes ESG Data Valuable?ESG is a framework that allows companies to measure nonfinancial risk to business,balanced agai

34、nst ethical and sustainability priorities.ESG data can help companies gauge their own performance as well as that of other entities,such as suppliers,that might be evaluated as potential business partners.For those who are just starting to explore ESG,one common question is“Which is the most importa

35、nt component the E,the S,or the G?”The answer is:it depends,because there are many different ESG use cases that vary according to industry sector and user.A procurement team focused on supplier diversity requirements might attach greater importance to the“S”dimension.In other instances,a climate-rel

36、ated event with international impacts,such as the Canadian wildfire smoke that reached all the way to Europe,reinforces concerns about greenhouse gas(GHG)emissions which fall under the“E”dimension.If your particular use case attaches greater materiality,or importance,to considerations that fall unde

37、r one or more particular dimensions,your data provider should be able to work with you to analyze the separate rankings in each dimension to see how they have influenced the overall ranking.08A Practical Guide to ESG Data and ToolsSpecific use cases for ESG may differ,but the value of ESG data and r

38、ankings is being recognized and demonstrated in several significant areas:01 ESG insights help identify and assess supply risksThe major source of a companys value today is not its real assets or its equipment,but intangible factors including intellectual property,brand equity,and reputation.From a

39、reputational risk perspective,the potential damage done to a companys image and subsequently its revenue by being caught up in a controversy originating with a counterparty is significant.Increasing transparency around business actions means that what was previously not noticed or tracked is now ver

40、y visible.This has pushed companies to put more pressure on their business partners,such as suppliers,because they know that consumers and investors often shun businesses that run into environmental,social,or ethical difficulties.Reducing risk is a key priority for procurement,so its logical for pro

41、curement teams to help minimize potential risks to their own organizations from suppliers ESG challenges.02 ESG helps companies be more competitive and compliantProcurement can tap into supplier ESG rankings to fortify their supply chains and be more resilient than their competitors.Supplier ESG met

42、rics can help companies increase supply chain visibility and make better business decisions with more useful supplier intelligence.Having a healthier,more resilient supply chain also puts a company in a stronger position to win more business with its own customers,ultimately leading to greater produ

43、ctivity,profit,and shareholder value.This recognition is prompting some companies to require ESG disclosure as part of their supplier sourcing and onboarding process.From a compliance standpoint,monitoring supplier ESG practices helps ensure that a company keeps up with evolving regulations and stan

44、dards related to sustainability and ethical operations.This is especially important in more heavily regulated markets and industries,which may have specific ESG standards or mandatory certifications.For example,starting on January 1,2024,Germanys Act on Corporate Due Diligence in Supply Chains oblig

45、ates companies with 1,000 or more employees in Germany to take“appropriate measures”to respect human rights and the environment within their supply chains.503 ESG helps companies shape their reputation and brandCompanies that prioritize ESG rankings their own and their suppliers and vendors are maki

46、ng a statement about their values and their commitment to transparency and accountability.This is especially important in an era where consumers,investors,and other stakeholders are looking for evidence that a business is a responsible corporate citizen.ESG awareness helps build trust and credibilit

47、y while signaling a focus on long-term sustainability.This in turn contributes to the perception that the business is stable and dependable.In times of crisis,companies that have built a track record around ESG practices will be better positioned to recover from negative publicity and regain the tru

48、st of their stakeholders.Alignment with ESG principles can be even more important for companies in regulated industries that want good relationships with regulators and government bodies,again reinforcing trust and credibility that could modulate the severity of enforcement actions or penalties shou

49、ld a problem occur.09A Practical Guide to ESG Data and Tools09A Practical Guide to ESG Data and ToolsEnvironmental,social and governance(ESG)data captures extra-financial factors that typically arent found in financial analysis,including:Company Management of Energy and Water UseWaste GenerationEmpl

50、oyee Rights and Working ConditionsCommunity EngagementData Privacy Rightsalong with more traditional indicators of corporate accountability and transparency.PART 2How ESG Can Help Supplier Risk AssessmentsThe past few years have witnessed wave after wave of turbulence in the global business environm

51、ent.This has contributed to greater public expectations for companies to confront wider social issues which has led companies to the realization that managing ESG impacts in supply chains is as essential as quality,cost,and time to deliver.ESG data is drawn from a range of sources;besides company re

52、ports and filings,these can include websites,news releases,and data collected directly from companies through surveys or voluntary disclosures.It can also include data provided by governments and gleaned from social media or other public sources.Taken together,this information can give companies a c

53、learer and fuller picture of suppliers credentials and allow them to make better decisions about how to conduct relationships with those suppliers.For example,some companies have started using ESG data to help identify suppliers whose business practices might imperil those companies own goals and ob

54、jectives.One ESG topic currently receiving particular scrutiny is GHG emissions,included in the“E”(environmental)dimension.In an analysis of a sample of 22,000 companies,Dun&Bradstreet has observed a correlation between GHG emissions management and the companies proportional delinquency rate(a measu

55、rement of the percentage of late payments made by a company).10A Practical Guide to ESG Data and Tools10A Practical Guide to ESG Data and ToolsGood1.0 x1.5x1.7xMediumPoorSource:Dun&BradstreetWithin the“G”(Governance)dimension,the theme of business resiliency captures how well companies recover from

56、disruptive events,like an economic downturn or natural disaster.Companies that rank well for business resiliency show a more dramatic change in sales growth over time,as well as have 1.4 times lower delinquency rates than companies that rank poorly.FIGURE 4 Proportional Delinquency Rate Correlated t

57、o GHG Emissions ManagementFIGURE 4 Proportional Delinquency Rate Correlated to GHG Emissions ManagementProportional Delinquency Rate11A Practical Guide to ESG Data and Tools11A Practical Guide to ESG Data and Tools18%3%GoodMediumPoor19%13%10%1%GoodMediumPoor1 Year3 Years5 Years4%-1%-9%GoodMediumPoor

58、Source:Dun&BradstreetGood1.0 x1.3x1.4xMediumPoorSource:Dun&BradstreetFIGURE 5Business Resiliency Correlated to Sales GrowthFIGURE 5Business Resiliency Correlated to Sales GrowthAverage Change in Sales Growth over a 5-Year PeriodSample of 300,000 CompaniesFIGURE 6Proportional Delinquency Rate Correla

59、ted to Business ResiliencyFIGURE 6Proportional Delinquency Rate Correlated to Business ResiliencyProportional Delinquency Rate12A Practical Guide to ESG Data and Tools12A Practical Guide to ESG Data and ToolsThe insight derived from ESG data can be used to better gauge the stability and success of c

60、ompanies,both during supplier selection and for ongoing supplier relationship management.For example,procurement and supply management leaders can:HOTSPOT companies that are lagging in specific areas in a quick and efficient way instead of having to survey or collect data directly on an entire suppl

61、y chain portfolioPRIORITIZE oversight on these companies and track them month to month to see if their performance continues to lag with potential negative consequences for your business or if it improvesENGAGE these companies directly and encourage them to improve their performance,perhaps by setti

62、ng up a performance plan or even a contractual agreement to incentivize improvementSUBSTITUTE alternate suppliers considered too high-risk with others that offer the same services but with better ESG performanceINCORPORATE expectations for ESG performance in RFP criteria,contracting,and supplier onb

63、oarding to screen for companies that will be able to deliver the right products and services while operating with consistent reliability and responsibilityThe effort to manage supplier risk can be complicated by the risks that lie hidden in the lower tiers of supplier networks.What if one of your ke

64、y direct suppliers is using a vendor thats using child labor in a remote factory to make their products?Its likely that you wouldnt have any idea until the expos hits the news media.But most companies find it extremely difficult to compile reliable data about their supply networks beyond the first t

65、ier.This is a case where monitoring supplier ESG performance helps compensate for the lack of lower-tier supplier visibility,particularly concerning environmental and labor practices.But all ESG data is not the same,as well discuss in the following section of this guidebook.13A Practical Guide to ES

66、G Data and ToolsPART 3A Deeper Dive into ESG Use Cases and Risk ScenariosAggregating a massive array of ESG-related data into manageable,decision-useful indicators has been one of the long-term aspirational goals of the sustainability field.With the greater availability of ESG-relevant data around t

67、he world alongside the rapid developments in analytics and artificial intelligence,that goal has gotten much closer to reality.The typical process involves standardizing collected ESG data through a process of normalization to allow grouping and comparing of different metrics.For example,1,000 tons

68、of carbon dioxide equivalent(tCO2e)can be converted to a number between 0 and 100 depending on the included maximum and minimum values in the sample(which may be the entirety of companies sampled,or only companies in the same industry).Metrics can be aggregated to more general themes,such as environ

69、mental performance,which can be rolled up again into an overall ESG score.Before such aggregation,however,topic-specific weighting can be applied based on the materiality of that topic to the companys sector.The Sustainable Accounting Standards Board(SASB)Materiality Map,for example,provides a matri

70、x that illustrates which ESG topics are considered financially material to distinct sectors.6 Weighting of topics can also vary depending on preference,such as weighting diversity more heavily because its considered more important by specific stakeholders.14A Practical Guide to ESG Data and Tools14A

71、 Practical Guide to ESG Data and ToolsThe current market for ESG data as well as the actual practice of incorporating ESG scores and measures into portfolio risk mitigation are considered to be early-stage.Data sets needed to cover the full range of ESG risks are broad,and different providers have d

72、ifferent methodologies for normalizing,processing,and weighting the data they ingest to create ESG ranking frameworks.Supplier Portfolio Case StudyAs an example of how an ESG ranking data set might be used to assess a companys supplier network,we can look at how Dun&Bradstreets ESG Rankings were app

73、lied to the supplier portfolio of a financial services company.In this ranking system,0 represents the lowest risk and 5 represents the highest risk.This organization has 1,251 suppliers in its portfolio,with an overall ESG ranking of 2.13,ahead of the industry average of 2.40.Most of its suppliers

74、are high performing,but 36 suppliers have“poor”or“very poor”rankings,suggesting a need for further investigation and possible replacement creating a stronger supply chain.2.135.02.401,251Portfolio0.0Very GoodVery PoorPoorGoodMedium33827.0%37.4%32.7%4684091818Source:Dun&BradstreetIn the environmental

75、 dimension,the majority of the companys suppliers perform well,but 48 of those suppliers have“poor”or“very poor”performance(see fig.8see fig.8).This is in part driven by the 17 suppliers that have negative environmental compliance indicators(typically related to fines or noncompliance)FIGURE 7A Fina

76、ncial Services Companys Supplier Portfolio:ESG Rankings and AveragesFIGURE 7A Financial Services Companys Supplier Portfolio:ESG Rankings and AveragesESG Rankings Count and DistributionPortfolio Average vs.Industry Average15A Practical Guide to ESG Data and Tools15A Practical Guide to ESG Data and T

77、oolsand concerns with some suppliers regarding their energy management,materials sourcing,waste management,climate risk,and water management(see fig.9).2.550.05.02.62Low Risk High RiskVery GoodVery PoorPoorGoodMedium7731.8%13.2%35.1%11.6%8.3%328520282.381.771.59Emissions and ClimateEnvironmental Ris

78、kEnvironmental Opportunities1.52Natural ResourcesSource:Dun&BradstreetFIGURE 8A Financial Services Companys Supplier Portfolio:Environmental Rankings and AveragesFIGURE 8A Financial Services Companys Supplier Portfolio:Environmental Rankings and AveragesEnvironmental Rankings Count and DistributionP

79、ortfolio Average vs.Industry AverageEnvironmental Themes Averages16A Practical Guide to ESG Data and Tools16A Practical Guide to ESG Data and ToolsCorporate Compliance BehaviorsBusiness Resiliency and SustainabilityBusiness EthicsBusiness TransparencyNegativeNeutralPositive15711791444595732119287Env

80、ironmental ComplianceNegativeNeutralPositiveEnvironmental OpportunitiesMaterial Sourcing and ManagementWaste and Hazards ManagementClimate RiskGHG EmissionsWater ManagementEnergy Management176144251686835841422Supplier EngagementNegativeNeutralPositiveData PrivacyProducts and ServicesCommunity Engag

81、ementCorporate PhilanthropyTraining and EducationHeath and SafetyProduct Management and QualityLabor RelationsCyber RiskDiversity and Inclusion10388271034114543538102778433012614214471282833201Source:Dun&BradstreetBeing associated with a supplier that has poor environmental credentials poses a real

82、risk to a company not just in terms of reputation.If a preventable environmental accident threatens the supply or shipping of goods or components to the company,that means customer demands may go unfulfilled,resulting in lost profits on top of the damaged reputation.Using sustainable sources and ope

83、rating in a responsible fashion can reassure customers,senior leaders,shareholders,and supply chain managers.In the social dimension,ESG rankings suggest that the majority of the companys suppliers have good or average performance,but some appear problematic(see fig.10see fig.10).This is partly due

84、to negative supplier engagement(often related to poor supply chain management,including poor payment history).However,there are also issues with product and service quality as well as data privacy,which may involve security breaches of customer information.FIGURE 9Breakdown of Primary Reasons Influe

85、ncing the Environmental RankingFIGURE 9Breakdown of Primary Reasons Influencing the Environmental RankingEnvironmental Reason Codes17A Practical Guide to ESG Data and Tools17A Practical Guide to ESG Data and ToolsCorporate Compliance BehaviorsBusiness Resiliency and SustainabilityBusiness EthicsBusi

86、ness TransparencyNegativeNeutralPositive15711791444595732119287Environmental ComplianceNegativeNeutralPositiveEnvironmental OpportunitiesMaterial Sourcing and ManagementWaste and Hazards ManagementClimate RiskGHG EmissionsWater ManagementEnergy Management176144251686835841422Supplier EngagementNegat

87、iveNeutralPositiveData PrivacyProducts and ServicesCommunity EngagementCorporate PhilanthropyTraining and EducationHeath and SafetyProduct Management and QualityLabor RelationsCyber RiskDiversity and Inclusion10388271034114543538102778433012614214471282833201Source:Dun&BradstreetThe governance dimen

88、sion for the financial services company shows generally higher supplier ESG rankings,but there are concerns about a few suppliers that may require further exploration(see fig.11see fig.11).These largely have to do with business resiliency which encompasses financial stability and the ability to resp

89、ond to climate events,among other factors.Corporate Compliance BehaviorsBusiness Resiliency and SustainabilityBusiness EthicsBusiness TransparencyNegativeNeutralPositive15711791444595732119287Environmental ComplianceNegativeNeutralPositiveEnvironmental OpportunitiesMaterial Sourcing and ManagementWa

90、ste and Hazards ManagementClimate RiskGHG EmissionsWater ManagementEnergy Management176144251686835841422Supplier EngagementNegativeNeutralPositiveData PrivacyProducts and ServicesCommunity EngagementCorporate PhilanthropyTraining and EducationHeath and SafetyProduct Management and QualityLabor Rela

91、tionsCyber RiskDiversity and Inclusion10388271034114543538102778433012614214471282833201Source:Dun&BradstreetFIGURE 10Breakdown of Primary Reasons Influencing the Social RankingFIGURE 10Breakdown of Primary Reasons Influencing the Social RankingSocial Reason CodesFIGURE 11Breakdown of Primary Reason

92、s Influencing the Governance RankingFIGURE 11Breakdown of Primary Reasons Influencing the Governance RankingGovernance Reason Codes18A Practical Guide to ESG Data and ToolsPART 4Getting Started:Creating an ESG StrategyThe example in the previous section serves to illustrate how ESG data and analytic

93、s can be put to practical use to support supplier risk assessments.But its understandable that companies just starting to get their heads around ESG need more guidance on how to get hands-on with it.One common initial problem has to do with acquisition of ESG data.Insufficient or nonexistent data is

94、 a significant challenge that holds many companies back from starting to address ESG goals.Immature data collection,management,and analysis practices hinder a companys ability to draw insight and apply ESG analytics at scale,which limits progress and the speed at which ESG maturity can be achieved.I

95、n addition,ESG adoption hurdles are largely driven by the inadequate technology that many firms use to manage,analyze,and report ESG data.Finding a reliable ESG data resource that can be automatically integrated with your first-party or proprietary data can vastly help increase visibility into ESG r

96、isk management.The current landscape for ESG data providers contains many established vendors offering broad data sets to cover the widest possible range of ESG risks.Different firms distinguish their offerings from each other by different criteria for example,the depth of their coverage of Scope 1,

97、2,or 3 emissions;whether the available data covers private or public entities,or(ideally)both;and which of the leading sustainability frameworks,such as the Carbon Disclosure Project(CDP),Global Reporting Initiative(GRI),and SASB,are leveraged as part of the data providers ranking methodology.Severa

98、l analyst firms issue regular reports on products and providers of tools for managing ESG and sustainability initiatives;these reports may be helpful in matching your organizations needs with the right data resource.19A Practical Guide to ESG Data and Tools19A Practical Guide to ESG Data and ToolsHe

99、re are some key steps to take toward ESG strategy implementation:STEP 01 Identify the ESG criteria that are most relevant to your industry and your organizations goals.Reduction of GHG emissions is a common one,but others that might be important could include diversity and inclusion credentials of s

100、uppliers,or their employee health and safety records.STEP 02 Decide which standards and metrics to use to measure supplier performance against others in the same industry and in your own supplier portfolio.These metrics can be tracked over time to see how supplier performance is changing and to help

101、 determine whether corrective action should be requested.STEP 03 Start collecting ESG data using the selected metrics and sources.Depending on your resources and technology,you may use internal data,external ESG data providers,or a combination of both.Invest in data collection and analysis tools as

102、needed.STEP 04 Engage your suppliers and vendors.Collaborate actively with these partners to ensure that they align with your ESG goals and standards.If the supplier is essential to your core business,offer to help them find more sustainable sources or improve their working practices or manufacturin

103、g methods.STEP 05 Report and communicate progress and achievements.Develop a clear and transparent ESG reporting strategy to help raise awareness of your supplier ESG program with internal and external stakeholders,including investors,customers,employees,and the public.STEP 06 Stay informed about ES

104、G-related laws and regulations that may affect your industry.Ensure compliance with reporting requirements and other relevant regulations.STEP 07 Tap into the knowledge of your data partner.If your company is new to ESG,ask the experts or consultants at your ESG data provider to help you navigate th

105、e complex,continuously evolving landscape of ESG data,rankings,and analytics.A Final ThoughtYou may still hear some casual references to ESG as a“fad,”but the fact is that ESG is here to stay;there is now a credible ESG ecosystem contributing to an active feedback loop accelerating innovation in thi

106、s space.Even if its not called ESG in the future,there will still be an underlying need to better manage nonfinancial risks encompassing environmental,social,and governance factors.ESG has gone well beyond theory,and its time for organizations to take action especially now that ESG data on both publ

107、ic and private companies is becoming more widely available.As the ESG landscape becomes more defined by incoming regulation,harmonization,and expectations around sustainability,supply chain management teams should capitalize on the opportunity to lead the business in instilling ESG into its operatio

108、ns and strategies.Learn more at: DUN&BRADSTREETDun&Bradstreet,a leading global provider of B2B data,insights and AI-driven platforms,helps organizations around the world grow and thrive.Dun&Bradstreets Data Cloud fuels solutions and delivers insights that empower customers to grow revenue,increase m

109、argins,manage risk,and help stay compliant even in changing times.Since 1841,companies of every size have relied on Dun&Bradstreet.Dun&Bradstreet is publicly traded on the New York Stock Exchange(NYSE:DNB).The information provided is for suggestion purposes only and is based on best practices.Dun&Br

110、adstreet is not liable for the outcome or results of specific programs or tactics undertaken based on your use of the information.Please contact an attorney or tax professional if you are in need of legal or tax advice.Dun&Bradstreet,Inc.2024.All rights reserved.(CR-1206363072113128 2/24) 1 G.H.Brun

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112、atters,”Ideas on Purpose,22 February 2022.Retrieved from https:/ Craig Stedman,“ESG Strategy and Management:Complete Guide for Businesses,”TechTarget,19 April 2023.Retrieved from https:/ Aaron Addicoat et al.,“2023 Global Chief Procurement Officer(CPO)Survey:Orchestrators of Value,”Deloitte,5 June 2

113、023.Retrieved from https:/ Jenny Gesley,“Germany:New Law Obligates Companies to Establish Due Diligence Procedures in Global Supply Chains to Safeguard Human Rights and the Environment,”Library of Congress,17 August 2021.Retrieved from https:/www.loc.gov/item/global-legal-monitor/2021-08-17/germany-new-law-obligates-companies-to-establish-due-diligence-procedures-in-global-supply-chains-to-safeguard-human-rights-and-the-environment6“Exploring Materiality,”Sustainability Accounting Standards Board(SASB),22 June 2023.Retrieved from https:/materiality.sasb.org